Information about a company's two products is as follows:
The products are currently sold in equal quantities.
Monthly fixed costs are $360,000.
What is the monthly breakeven sales revenue assuming a sales quantity mix of 50/50?
Give your answer to the nearest $.
A bakery manager is deciding how many batches of birthday cakes to decorate each day.
Demand for the birthday cakes varies from 12 to 15 batches per day. Each batch decorated and sold earns a contribution of $40 but each batch unsold leads to loss of contribution of $15.
The payoff table below shows the total $ contribution from each of the possibilities:
Based on expected values, the number of batches of birthday cakes the bakery manager should decorate each day is:
A completed unit of Product A requires 9 kg of material and 10% of material is wasted in the production process.
Material has a standard cost of $5 per kg.
Product A also requires 4 labour hours at a standard cost of $10 per labour hour and variable overheads at a standard cost of $2 per labour hour
What is the standard variable production cost per unit of Product A?
Where sales volume is the principal budget factor, which of the following is the correct order in which budgets have to be prepared?
TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customers’ specific requirements. The standard cost per unit of its most popular cake is as follows:
The general market prices at the time of purchase for Ingredient A and Ingredient B were $23 per kg and $20 per kg respectively.
TP operates a JIT purchasing system for ingredients and a JIT production system; therefore, there was no inventory during the period.
Prepare a statement which reconciles the flexed budget material cost and the actual material cost. Your statement should include the material price planning variances, and the operational variances including material price, material mix and material yield.
What was the material price planning variance for ingredient A?
A special contract requires 640 units of component T.
The inventory of 280 units of component T cost $0.20 per unit but the component is not currently used by the company.
The current market price of component T is $0.24 per unit but the inventory could be sold for $0.15 per unit.
The relevant cost of the units of component T required for the special contract is:
A pharmaceutical company manufactures pesticides which contain highly toxic chemicals.
In the context of environmental costing, which of the following would be classified as an external failure cost?
A company produces a product that requires two materials, Material A and Material B. Details of the material quantities and costs for August are given in the table below.
Budgeted and actual output of the product for August was 12,000 units.
The material yield variance for August is:
A decision tree is being evaluated back to a decision point.
There are two alternatives at this point:
1. To abandon the project and generate a return of $435,000;
2. To continue with the project and generate the following possible returns:
What value should be included at the decision point?
TESTED 22 Feb 2025
